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Nine-Month Report January – September 2010

- Net sales increased by seven per cent to SEK 3,866.2M (3,617.7).
- Operating profit increased to SEK 403.8M (217.3) including a capital gain of SEK 140M. 
- Profit after tax increased to SEK 337.6M (151.5) including a capital gain of SEK 140 M.
- Profit per share increased to SEK 15.92 (7.49). Excluding the capital gain, profit per share amounted to SEK 9.32.
- Continued good organic growth.

The above relates to the remaining operation and the capital gain from the divestment of Beijer Tech.

The G & L Beijer Group reported a continued positive trend for the third quarter. Organic growth strengthened whilst profit continued to improve. At the end of the first quarter, the Beijer Tech business area was divested. It means that Beijer Tech’s sales and results are not included in the figures reported below. Consolidated sales for the first nine months of the year increased by seven per cent to SEK 3,866.2M (3,617.7). Sales for the third quarter rose by six per cent to SEK 1,410.6M (1,325.0). In local currencies, sales for the third quarter increased by 12 per cent. 

Consolidated operating profit for the first three quarters rose to SEK 403.8M (217.3). The result includes a capital gain of SEK 140M from the divestment of Beijer Tech. Excluding this gain, operating profit amounted to SEK 263.8, equivalent to an increase of 21 per cent. For the third quarter, consolidated operating profit increased by 23 per cent to SEK 122.3M (99.2). 

Beijer Ref
Beijer Ref’s sales for the first nine months increased by seven per cent to SEK 3,866.2M (3,617.7). Organic growth amounted to approximately nine per cent. Acquisitions affected sales positively, as Carrier ARW was not included in the figures for January 2009, whilst a strengthened Swedish currency affected sales negatively when translated into SEK. Sales for the third quarter increased by six per cent to SEK 1,410.6M (1,325.0). Organic growth for the third quarter amounted to 12 per cent. Virtually all markets reported a good development. Several markets, including South Africa, Holland, Finland, France, Spain and Italy reported especially strong demand. 

Beijer Ref’s operating profit increased by 22 per cent to SEK 281.6M (231.4) for the first three quarters. Operating profit for the third quarter rose by 23 per cent to SEK 127.7M (104.0). The improved results are essentially explained by increased sales volumes and strict control of expenses. Savings and structural measures in Carrier ARW have been implemented according to plan. These continue to have positive effects on the result. 

Consolidated profit before and after tax
The Group’s financial income/expense for the nine-month period amounted to SEK 1.6M (-9.9) and to SEK 2.4M (-0.6) for the third quarter. Financial income/expense includes a share in profits of associated companies of SEK 6.0M (6.2) and SEK 2.0 M (3.5) for the respective period. Profit before taxes amounted to SEK 405.4M (207.4) for the first nine months. It increased by 26 per cent to SEK 124.7M (98.6) for the third quarter. Profit after tax amounted to SEK 337.6M (151.5) and to SEK 91.4 (71.5) for the respective period. Profit per share amounted to SEK 15.92 (7.49) for the nine-month period. Excluding the capital gain of SEK 140M, profit per share amounted to SEK 9.32 (7.49) for the remaining operations. 

Other financial information
Consolidated capital expenditure including acquisitions amounted to SEK 28.8M (1,107.0). The cash flow from current operations amounted to SEK 211.0M (186.3) for the nine-month period. Liquid funds, including unutilised bank overdraft facilities, were SEK 539.9M (425.4) at the end of the third quarter. Shareholders’ equity amounted to SEK 2,243.9M (2,099.7). Net debt amounted to SEK 461.6M (536.7). The equity ratio was 53.8 per cent (49.8). The average number of employees during the period was 1,682 (1,584). 

Significant events
During the first quarter, G & L Beijer divested its Beijer Tech business area to Beijer Alma. G & L Beijer received a consideration of 2.7 million newly-issued B shares in Beijer Alma and SEK 38.7M in cash. In total, the transaction is valued at approximately SEK 345M and G & L Beijer’s capital gain amounted to SEK 140M. The divestment of Beijer Tech was a move forward in the concentration of G & L Beijer towards the strongly growing refrigeration wholesale operation. As a result of the transaction, G & L Beijer became a significant shareholder in Beijer Alma. 

Beijer Tech’s sales amounted to SEK 141.8M (140.1) for the first quarter of 2010 and the average number of employees was 175. Operating profit amounted to SEK 6.3M (6.5). 

During the first quarter, Beijer Ref signed a strategic agreement with the French GDF Suez group, one of the leading companies in the world within the energy sector. The agreement, which is a global general agreement, means that Beijer Ref becomes a preferred supplier to GDF Suez in all markets. The contract covers Beijer Ref’s entire product programme which covers refrigeration systems and comfort cooling. This is the first agreement of its kind that Beijer Ref has signed with a global customer. GDF Suez is already a customer of Beijer Ref in some markets. The agreement offers a significant potential for increasing sales to GDF Suez in both existing and new markets. 

Risk assessment
The operations of the G & L Beijer Group are affected by a number of external factors, the effects of which on the Group’s operating profit can be controlled to a varying degree. The Group’s operations are dependent on the general economic trend, especially in Europe, which controls the demand for Beijer Ref’s products and services. Acquisitions are normally linked with risks, for example loss of staff. Other operating risks such as agency and supplier agreements, product responsibility and delivery undertaking, technical development, warranties, dependence on individuals, etc, are continually being analysed and, when necessary, action is taken to reduce the Group’s risk exposure. In its operations, G & L Beijer AB is exposed to financial risks such as currency risk, interest risk and liquidity risk. The parent company’s risk picture is the same as that of the Group. 

Financial information
- The Year-End Report for 2010 will be published on 10 February 2011.
- The Annual Report for 2010 will be published during April 2011.
- The Three-Month Report for 2011 will be published on 4 May 2011.

Malmö, 21 October 2010
G & L Beijer AB (publ)
Joen Magnusson, MD

For further information:
Joen Magnusson, MD
phone +46 40 35 89 00, mobile +46 709 26 50 91
Jonas Lindqvist. CFO
phone +46 40 35 89 00, mobile +46 705 90 89 04 

Accounting principles
This interim report has been prepared in accordance with IAS 34, the Annual Accounts Act and RFR 2.3.  

G & L Beijer AB continues to apply the same reporting principles and valuation methods as those described in the latest Annual Report. 

Review report
We have carried out a review of this Interim Report for the G & L Beijer Group for the period 1 January-30 September 2010. The Board and the MD are responsible for preparing and presenting this financial interim information in accordance IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion about this financial interim information based on our review. 

We have carried out our review in accordance with the Standard for review engagement, SÖG 2410, Review of financial interim information carried out by the company’s elected Auditors. A review includes making enquiries, primarily to individuals responsible for financial matters and accounting matters, carrying out an analytical examination and implementing other audit checks.  

A review has a different emphasis and is significantly less extensive compared with the emphasis and extent of an audit in accordance with Auditing standards in Sweden RS and generally accepted auditing standards. The auditing checks implemented in a review do not enable us to acquire such assurance that we become aware of all important circumstances which would have been identified if an audit had been carried out. The expressed conclusion is based on a review and, therefore, does not have the assurance of an expressed conclusion based on an audit.  

Based on our review, no circumstances have emerged which give us reason to consider that this Interim Report is not, in substance, prepared for the Beijer Group in accordance with IAS 34 and the Annual Accounts Act and for the parent company in accordance with the Annual Accounts Act. 

Malmö, 21 October 2010
Mikael Eriksson and Cecilia Dorselius
Authorised Public Accountants